Left's no to100pc FDI in retail sector, capital goods

New Delhi, Feb 5: The Left parties today charged the UPA government with taking the route of administrative measures to carry forward its economic agenda by permitting joint ventures to allow FDI in the sectors which were not opened for it.

Asserting that their opposition to such " tactics" would continue, the leaders of the CPI, CPI(M) and Forward Bloc said they would resist any proposed relaxation in FDI norms for commodity exchanges, aviation and petroleum and 100 per cent FDI in retail sector.

After proposing relaxation of FDI norms for commodity exchanges, aviation and petroleum, the government is reportedly considering to further open up the Capital goods industry to foreign players.

CPI General Secretary A B Bardhan said," avoiding confrontation with the Left by not taking the legislative route, the government is definitely going ahead with the so-called economic reforms through administrative measures." Mr Bardhan, the veteran Communist and freedom fighter, said the Manmohan Singh government used the joint venture route to allow FDI in the sectors whch were not opened for it.

CPI National Secretary Shamim Faizi said the government's latest move was to allow FDI in capital goods sector." The government circles say to the extent that foreign investors would be allowed to set up shop in partnership with the domestic players." The assurance is that the latter would be allowed to take over the crucial sector with 100 per cent FDI, Mr Faizi said.

Referring to reports, the CPI leaders said it was unfortunate that the government, despite opposition from their supporting parties, was planning to allow 49 per cent FDI for textiles machinery, leather equipment, automated machines in the construction sector, mining and computer numerically- controlled( CNC) machines.

As of now, FDI in capital goods is restricted to equipment deployed by the power and petroleum sectors, they said.

CPI(M) senior leader and Polit bureau member M K Pandhe said even the US did not open up its retail sector for FDI." Now the government seems to have decided to allow 100 per cent FDI in the retail sector, the small traders running in millions with lakhs of their families will be wiped out." Mr Pandhe said the government was also planning to further increase FDI cap ''of 26 per cent in the insurance sector which would harm our national interests.'' "The government's plan to allow FDI in Capital goods would seriously hit our competitive capacity," the CPI(M) leader added.

Forward Bloc National Secretary G Devrajan said despite opposition by the Left the government had used the tactics in the case of retail trade. The Wal-Mart had been allowed to collaborate with the Bharti Enterprises.

"Obviously the day is not far off when the Wal-Mart would be allowed 100 per cent FDI in retail. The opening up of the Capital goods sector will have an adverse impact on PSUs like the BHEL," Mr Devrajan said.

The Left leaders said already the import of power plant machinery from abroad, had affected the production process in several PSUs.

Interestingly BHEL, they said, which was ''ignored in our own country had got many orders from several developing countries,'' they said adding that the Finance ministry which is fully behind foreign investors, should instead take steps to strengthen and expand the PSUs.

UNI